Suryajyoti Spinning to set-up specialty bottom weight fabric facility in technical collaboration with Italian Company, Pangea srl

Suryajyoti Spinning Mills Ltd has announced that the Company is setting up India's first specialty bottom weight fabric weaving, dyeing and finishing plant in technical collaboration with an Italian Company.

The Italian Company, Pangea SRL (Pvt. Ltd.) has been servicing the requirements of many major global fashion labels including discerning high-fashion Italian and global brands like Dolce & Gabbana, Marlboro Classics, Versace, Giorgio Armani, Roberto Cavali, Diesel and Reply, among others.

Pangea is headed by Mr. Pietro Valman who has been running and operating a specialty bottom wear fabric plant in Italy for over three decades.

Commenting on the alliance, Mr. A K Agarwal, Executive Director of the Company said:

"Pangea has maintained deep relationships with several European fashion houses over many years. Our association with Pangea gives us an avenue to provide high fashion / low cost options to some of the best known designer brands in the world. We are confident that the specialty bottom weight fabric initiative will add substantial value to all our stakeholders over the long term."

The bottom weight fabric initiative between the Company and Pangea will be structured as a SPV. The fabric manufactured under the SPV will be sold in India and overseas under a brand name - 'Pangea Fabrics'.

The major customers in the domestic market shall be the Export houses who cater to the needs of U.S.A and EU markets in the bottom wear. Other domestic customers will be the likes of Cantabils, TNG's, Lee Cooper's, Black Berry, Louis Philippe, Allen Solly, Levis Strauss, Color Plus, Zodiac, Arrow, Van Heusen, Dockers etc., i.e. the domestic brands operating in the Indian markets.

Production facility near Hyderabad

The bottom-weight fabric facility is being set up at Kurcharkal Village, Mahabubnagar District in Andhra Pradesh at a cost of Rs 104.5 crore. The project is being financed largely through debt, available to the Company at very attractive terms under the Textile Up gradation Fund (TUF) scheme and through the proceeds from a FCCB issue (The Company raised USD 10 million through a FCCB in Q4FY07).

The Company has started civil work at the proposed site and expects the project to be commissioned in the second half of FY08. The facility shall house weaving, dyeing and finishing capabilities. There will be 48 Airjet and 24 rapier looms for weaving bottom wear fabrics. Coating/foaming machines will be used to give the special finishes to bottom wear fabric.

At optimum capacity, the Company will manufacture twenty million meters of bottom wear fabrics. The unit will produce the bottom wear fabric having both special & normal finishes. In the third full year of production, specialty finished bottom weight fabric, which commands significant premium in the international market, is expected to comprise more than half the output and two-thirds of the revenue from this venture.

Source : Equity Bulls

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